Friday, May 22, 2015 10:32am
North Adams, MA now: 61 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: January Could Be Important
By Bill Schmick On: 04:18PM / Friday January 04, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

Now that the Fiscal Cliff is behind us and the spending battle is dead ahead, investors are wondering what lies ahead. Historically, the market's performance in January has been important. Since it is a good signpost for the future over the last 60 years, let's examine some of the indicators that many professional traders use.

Many investors look to the first five days of January as a gauge of where the markets are going for the rest of the year. During the last 40 years when those five first days were gainers, the markets were up for the entire year 85 percent of the time. For example, last year the S&P 500 Index gained 1.2 percent in the first five days of January. As a result, the S&P 500 Index was over 13 percent. That was close to the historical average. Over the last 39 years, the markets gained an average of 13.6% when the first five days of January were gainers.

Conversely, when the first five days are negative the markets were down for the year, but only 47.8% of the time. The indicator therefore, does not work as well on down periods. Readers should be aware that, in general, during post-election years the markets have not done well. Only 6 out of the last 15 post-election years saw gains in the first five days of the year. It looks like 2013 will be an exception.

Building on the first five days theory "where the S&P 500 goes in January, so goes the year" is the most widely used barometer traders follow and with good reason. Over the last 62 years (since 1950) this indicator has been accurate 88.7 percent of the time. Down Januarys invariably ushered in a new or extended bear market, a flat market or at least a 10 percent correction. The average loss for those years was 13.9 percent.

I guess the only good thing good to be said for those down years is that they were great buying opportunities since invariably the year after saw significant gains.

There is also something called the "January Barometer Portfolio," which is made up of the S&P's three best performing sectors in January. If you invested in them and held them through the February of the following year, you would beat the S&P Index on average by 1.4 percent. Finally, Januarys have been the best month of the year for NASDAQ performance consistently since 1971.

So here it is Jan. 4, the last day of the market week and stocks are up. So far, if the indicators hold, 2013 promises to be an up year for investors. I agree with that assessment. But that doesn't mean that everything will go straight up.

Now that the Fiscal Cliff is behind us, we face a long litany of worries. The battle over spending cuts has begun. We will see the debt ceiling reached very soon. The government will run out of money (again) by the end of February. Without a deal on spending, the drastic cuts in defense and entitlements trigger on March 1. That would hurt the economy. And in the wings, the credit agencies are waiting to downgrade our government debt once again unless a real effort is made to address the deficit.

Make no mistake, my readers, we will continue to be thrown between hope and despair by those fools in Washington. But markets normally climb walls of worry. My advice is to ignore the noise in Washington. Keep your eye on what is important— the growth in the economy. Those of you who followed my advice in November stayed invested, expected a last minute deal of the Cliff and were rewarded for your patience and perseverance.

I am waiting like everyone else to see what the rest of January brings. Until then, I will ride the ups and downs while continuing to buy any dip especially in emerging markets, (including China), emerging Europe and Europe overall. Hang tough and see it through until I say otherwise.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


0 Comments
     
News Headlines
Memorial Day Events 2015
Pittsfield Community Connection Introduces Team Fighting Youth Violence
Adams Library Rededication To Take Place Saturday
iBerkshire Tag Sales: May 22-24
Lanesborough FinCom Will Support Mount Greylock Budget Request
Dr. Merselis Awarded Honorary Business Doctorate From Antioch
McCann Tech Grad Interns on Fenway Grounds Crew
Adams Board of Health 'Blindsided' by Code Officer Cut
Pittsfield Councilors Calling For Engineering Study On City Hall
Majority of McCann Teachers Should Recieve High Evaluation Scores

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (169)
Independent Investor (228)
Archives:
May 2015 (4)
May 2014 (3)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
Tags:
Recession Interest Rates Debt Fed Stimulus Energy Europe Commodities Bailout Euro Metals Pullback Europe Federal Reserve Economy Greece Crisis Japan Stocks Debt Ceiling Selloff Stock Market Fiscal Cliff Rally Election Jobs Congress Housing Deficit Markets Banks Oil Taxes Retirement Currency
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: Will Memorial Day Kick Off a Strong Summer?
@theMarket: Another Record High
The Independent Investor: Millennials & Money
The Independent Investor: Avian Flu Scrambles the Egg Business
The Independent Investor: Does Another Trade Pact Make Sense?
@theMarket: Buy on the News
The Independent Investor: Should You Manage That 401(k)?
@theMarket: Right Back Into the Range
The Independent Investor: Brazil Not For the Faint of Heart
@theMarket: Earnings on Deck


SB: Hoosac Valley at Lenox
Megan Goyette pitched a two-hiter and Kali Puppolo went...
Senior Citizen Prom 2015
Drury High School Sociology Classes hosted the Senior...
T&F: Drury @ Hoosac
The Drury girls took the last track and field events Friday...
T&F: PHS @ Taconic
Jay Doucette won the 100 meters and shot put and placed...
BArT Prom 2015
Berkshire Arts & Technology Public Charter School held its...
Drury High Prom 2015
Drury High School held its prom at the school on Saturday...
Lenox Prom 2015
Lenox High School students were announced as they made...
Mount Everett Prom 2015
Mount Everett School held its prom at Crissey Farm in Great...
MCLA Graduation 2015
The Massachusetts College Of Liberal Arts Class of 2015...
Spring Neighborlies 2015
The Northern Berkshire Community Coalition had its...
UNO Community Center Opens
The United Neighborhood Organization (UNO) in North Adams...
Lacrosse: Wahconah at...
When the Pittsfield boys lacrosse team met with Wahconah on...
Girls Lacrosse: Mt Greylock...
Sarah Stripp scored five goals and added three assists to...
SB: Sabis at McCann Tech
Haley Malloy struck out 10, and Taylor Sprague went 3-for-4...
SB: Lee at Hoosac Valley
The Hoosac Valley softball team got a quick lead en route...
Lacrosse: Taconic at Wahconah
The Wahconah boys lacrosse team defeated Taconic Monday...
SB: Hoosac Valley at Lenox
Megan Goyette pitched a two-hiter and Kali Puppolo went...
Senior Citizen Prom 2015
Drury High School Sociology Classes hosted the Senior...
T&F: Drury @ Hoosac
The Drury girls took the last track and field events Friday...
T&F: PHS @ Taconic
Jay Doucette won the 100 meters and shot put and placed...
BArT Prom 2015
Berkshire Arts & Technology Public Charter School held its...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement